Nigeria: SMEDAN, AZSA Partner on MSME Development

By Crusoe Osagie, This Day Live

The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the Azsa Microfinance Bank have signed a Memorandum of Understanding (MoU) to develop a seamless intervention between the provision/acquisition of entrepreneurial training and access to finance.

The move is doe to the duo’s commitment to further facilitate the access of micro, small and medium enterprises (MSMEs), to all resources required for their development in the country.

The Director-General of SMEDAN, Alhaji Muhammed Nadada Umar, said at the signing of the MoU in Abuja, that the whole idea of the Agency’s partnerships with their relevant bodies was to soften the environment for MSMEs to grow.

“The whole idea is to service MSMEs to help them surmount the challenges that confront them from embarking on, or pose as challenges during the course of their businesses,” he said.

He added that business was not just about money and expressed satisfaction that the Agency has been able to collaborate with some State Governors in the country which has been bearing fruitful results.

Chairman of Azsa Micro Finance Bank, Alhaji Garba Ibrahim, who was accompanied by the Managing Director of the bank, Dr. (Mrs.) Lizzy Okereke, expressed belief that the MoU would go a long way in enhancing the development of MSMEs as well as helping the impoverished people in Nigeria, especially Lagos where they exist in huge numbers.

In line with objective of the MoU, SMEDAN would provide entrepreneurial training and other Business Development Services (BDS) such as mentoring and counselling, link trained MSMEs to Azsa Micro Finance Bank for the provision of funding and advocate the issues and challenges of Micro Finance Banks (MFBs) on the National Micro Finance Policy Consultative Committee.

On its part, Azsa Micro Finance Bank would, according to the MoU, provide credit and/or debt and equity financing facilities to MSMEs trained by SMEDAN that satisfy the lending criteria of the MFB, maintain a register of MSMEs that have benefited from the MFB’s facilities and recommend some of its customers to SMEDAN for training and entrepreneurial skill enhancement programmes of the Agency.

Nigeria: NESG Tasks Entrepreneurs Over Economic Devt

By Chris Ugwu, Leadership

The Nigerian Economic Summit Group (NESG), has called on entrepreneurs in Nigeria to take advantage of the large economic base in the country to drive national economic growth and development.

The Chairman of NESG, Mr. Folusho Philips, who stated this during a round-table on micro, small and medium-scale enterprises competitiveness and synergy, organised by the MSME Project in conjunction with the NESG, said this became necessary with a view to strengthen synergy, benchmark, promote productivity and enhance profitability, so that the federal government’s aspirations of economic transformation could be realised.

Philips noted that over 40 million informal entrepreneurs in Nigeria, which constituted the critical mass of the Nigerian economic life, unlock the much desired economic growth.

Speaking in the same vein, the Executive Secretary, Nigerian Investment Promotion Commission, represented by the Director, Policy and Advocacy, Mr. James Ebuetse, noted that development of the MSME sector would not only catalyse the next cycle of economic growth as envisaged by the federal government, but also engender competiveness and sustainability of MSME operations.

The Micro, Small and Medium Enterprise (MSME) Project, a pilot programme of the Government of Nigeria and the World Bank and implemented by the Nigerian Investment Promotion Commission (NIPC), was designed to improve performance and employment levels of MSMEs in selected non-oil sub-sectors within three States in Nigeria Abia, Kaduna and Lagos.

Over the years, it has supported the creation of five commercially oriented, privately financed microfinance institutions currently serving over 1.2 million clients with about 48,000 borrowers in 2010 alone and has also supported 71 privately owned business development service institutions which have served over 23,000 MSMEs while working with the CBN to develop the legal and regulatory framework for credit bureaus of which three are now functioning.

The NESG study on competitiveness of the MSME sector in Nigeria was initiated to facilitate public private dialogue necessary to improve overall MSME competitiveness, enhance the development of the sector and reduce unemployment levels.

The Micro, Small and Medium Enterprise (MSME) sector forms a significant proportion (nearly 90 per cent) of Nigeria’s business and industrial segment.

As is the case in the rest of the developing economies of the world, the growth of the sector is considered to be critical to a country’s economic and industrial development. It therefore presents the biggest opportunities for employment generation and economic productivity.

In continuation of the support of the sector, The Nigeria Economic Summit Group (NESG) – a private sector think-tank working to improve the business environment of private sector participation in the economy of Nigeria, with the support of the MSME Project Nigeria conducted a quick assessment of competitiveness and synergy of the MSME sector in Nigeria.

The Director-General and CEO of NESG, Mr. Frank Nweke Jr. while presenting the findings of the study which highlighted the current situation and challenges, stated that implementation of recommendations has been the bane of the development of the sector.

He noted that infrastructure, high cost of establishing businesses, inconsistent policy environment and power related issues are the critical limiting factors to MSME competiveness. A key recommendation from the workshop is the need to improve synergy amongst stakeholders especially the government agencies.

The workshop was attended by a broad spectrum of stakeholders in the MSME sector ranging from entrepreneurs, policy makers to MSME regulators in Nigeria including the Director General of SMEDAN, Alh. Mohammad Nadada Umar, representatives of the African Development Bank, CBN, SON, MAN, NASME, the Managing Director of PHCN, DG Federal Institute of Industrial Research (FIIRO), Raw Materials Research and Development Commission (RMRDC) and a host of other Private Sector Organizations.

Nigeria: SMEDAN supports cooperative microfinance banking

From Nigerian Pilot

The Small and Medium Enterprises Development Agency of Nigeria, SMEDAN has reiterated its commitment to provide professional training to managers of microfinance institutions in the country so as to improve their practices for optimum services.

Alhaji Mohammad Nadada Umar, Direrctor General of the Agency, while receiving two groups from the Hasal Institution of Micro-finance Studies, HIMS Academy Limited and the Academy of German Cooperatives, ADG International who paid him a courtesy visit in his office in Abuja, requested for details of cooperation between the two bodies so that SMEDAN could partner with them.

“Small and Medium enterprises, SMEs and micro-finance are one and the same. Retired workers, graduates, and even employed people who ventured into business to cater for themselves and their families, make up the SME sub-sector which needs the micro-finance banks as much as the micro-finance banks need them to stay in business.

“Invariably, SMEDAN is ever ready to cooperate with, and support them to position them better in helping to tackle the main challenge of finance militating against the developments and sustainability of micro, small and medium enterprises, MSMEs in the country”, he said.
The director general disclosed that the agency had already provided periodic training programmes to the financial managers, but added that “there is always room to do more to widen the success margin of our mandate”.

Umar regretted that development of SMEs was not given top priority since the nation’s attainment of independence, noting that this had led to the rising level of poverty and insecurity in the country.
“The time for the average Nigerians to appreciate the value of being economically independent is now. That is why SMEDAN, in collaboration with the National Bureau of Statistics, NBS is developing a National MSME Rating Database which would assist financial institutions in their appraisals of MSMEs in the country” he stressed.

Earlier, the Director, HMS Academy, Mr. Rogers A.I Nwoke had informed that the academy, is an institution for further learning in microfinance and entrepreneurial studies with focus on professional training on advanced and effective operation as well as management of microfinance institutions.

Nwoke said the collaboration between HIMS and ADG, a German-based management and finance training institute, was borne when a team from HIMS visited Germany on an exposure visit to study the country’s cooperatives system of microfinance banking, pointing out that despite the global economic meltdown, Germany’s cooperatives banking sector remained vibrant.

“Our desire to learn more about this successful formula and possibly apply it to the Nigeria situation led to alliance talks between the two bodies, which has today, produces collaboration”, he enthused.
In his brief comments, the Director, ADG International and leader of the German team, Mr. Rudiger Meister, said that the German cooperative provides capacity building and consultancy services to international cooperative banks, associations, donor organizations, microfinance and other financial institutions.

He said: “At present, we provide credit facilities to SMEs in Germany, sustaining them without any assistance from the German government. We now provide the same service to SMEs in other countries all over the world as a donor organization”, he added.

The two institutions, set to sign a Memorandum of Understanding, MoU on July 7, 2011 hoped to bring to Nigeria in particular and West Africa in general, service collaboration as it relates to knowledge developments and professional microfinance practices in line with international standards.

Nigeria: Funding, bane of MSME development in Nigeria – DG SMEDAN

By Gbola Subair, Nigerian Tribune

THE Director- General of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN),

Alhaji  Muhammad Nadada Umar, has stressed the need for dedicated banks to fund small and medium enterprises (SMEs) in Nigeria to ease their financial difficulties.

Alhaji Umar noted this while receiving a team from the Deutcshe Gesellschaft fur Internationale Zusammenarbeit (GIZ), a German organisation working on a new private-sector development programme aimed at improving the access of micro, small and medium enterprises (MSMEs) to financial services.

The development programme, named Sustainable Economic Development in Nigeria (SEDIN), also aims to foster employment within MSMEs through an improved business-enabling environment.

Alhaji Umar, who noted the similarities in the mandates of SMEDAN and SEDIN said that while funding posed the greatest challenge to the development of MSMEs in the country, SMEDAN remained committed to helping them surmount all challenges in the course of their growth and development through partnership with donor agencies, financial institutions and other government agencies that could make positive impact in the sustainability of the MSMEs.

Earlier at the interactive session of the two bodies which was held at the SMEDAN Headquarters in Abuja, the visiting Advisors from GIZ, Mr Alexander Speed and Mr Klaus Reiner, in company of the Local Economic Development Coordinator, Margaret Joshua, expressed excitement at the prospect of a possible collaboration with SMEDAN, adding that the objectives of the cooperation would have a huge impact on the nation’s economy with the support of the Federal Government.

Mr Alexander Speed said that the promotion of selected value chains from three selected states in Nigeria, including Niger State, would enable the programme to ascertain the effects of Nigeria ’s financial sector reforms in line with target group needs and conditions at federal, state and local government levels.

‘’Embedded in the Financial Sector Strategy 2020 (FSS 2020) and the strategic approaches for private-sector development under the general Vision 20:2020, our programme will adopt an integral capacity development approach at the interface of public, private and financial sectors’’.

Explaining further, Mr Reiner said that support would be given to reviewing the microfinance policy, the regulation and certification of microfinance banks and introduction of microinsurance.

“Of prime concern”, he added, “are reforms in land and company registration, planning and taxation systems just as we are also looking at providing support to Nigeria in regional convergence with ECOWAS which, we assure, would promote the implementation of ECOWAS protocols at national level”.

He noted that the programme would assist in raising awareness among decision-makers on issues of financial and private-sector development.

Nigeria: …Still on improving SMEs access to finance

By Siaka Momoh, Businessday Online

Facilitating adequate access to finance by small enterprises in Nigeria and other developing countries is an issue that will continue to attract discussion for a long time.

You will recall that last week, this issue was a subject of discussion by this writer, and it continues today with remarkable revelations.

The fact that has been established is that small businesses need funding, and that when they eventually get it, it’s always at high costs and at impossible rates. Financing windows other than the traditional commercial banks and microfinance banks have been suggested.

You will recall it was noted last week that the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the African Development Bank (ADB) held talks on providing access to working capital for micro, small and medium enterprises (MSMEs) in Nigeria.

The discussion, which took place in Abuja between the Agency and a delegation from the visiting continental development finance institution to Nigeria, centred on the creation of a special pool of fund in the African Development Bank, specifically for MSMEs funding and promotion.

Another financing window mentioned was the incentive-based Risk Sharing Framework for Motivating Agricultural Lending in Nigeria (NIRSAL). AGRA and McKinsey & Company/Philips Consulting Nigeria are working with the Central Bank of Nigeria (CBN) to support the design of proposed incentive-based NIRSAL. SMEDAN is also involved.

There was also the Nigerian MSME Project, a pilot initiative of the Federal Government and the World Bank in Abia, Kaduna and Lagos states, which the Nigerian Investment Promotion Corporation (NIPC) is driving. The Project aims to increase the performance and employment levels of MSMEs in selected non-oil industry sub-sectors, and in the three targeted states of the country listed above.

And there was the Nigerian Stock Exchange’s (NSE), Over The Counter (OTC) market designed for small enterprises – funding small enterprises through the capital market.

Jane Nelson, in a document ‘Building Linkages for Competitive and Responsible Entrepreneurship’ facilitated by UNIDO and Mossavar-Rahmani Centre for Business and Government, John F. Kennedy School of Government, Harvard University, puts up an argument that helped to take up the small enterprise funding discourse further.

His argument: Patricof and Sunderland argue, “Donors need to face the reality that young companies that can really move the needle on innovation, inspiration, and employment need high-risk, reasonably-sized equity investment to grow, not the limited doles of short-term, high interest debt currently provided.”

They observe that the type of long-term, permanent equity capital provided to young youth growth companies in developed countries by Angel investors and venture capitalist is almost impossible for similar companies to access in developed countries.

Citing challenges such as weak managerial capacity, business environment risks, limited exit opportunities, high transaction costs, limited deal flow, and currency risk, they argue that, “The combination of these factors make SME investing in growth-oriented companies in developing countries difficult, if not impossible, to justify in commercial terms. They are among a growing number of investment practitioners calling on donors, government and private sector financial institutions to explore new financing models that take into account the high risks, high transaction costs, low volume, and below market rates of return endemic to the sector.”

The UN commission concurs with the challenge, and like Patricof and Sunderland, it argues that a web of factors is at work, at just lack of capital. Related challenges cited by the commission include: weak property rights, lack of enforcement of contracts, lack of bankruptcy laws, further increasing the risk to investors, poor financial institutions with limited interest and lending skills for entering this market, lack of reliable credit information agencies and disclosure requirements; illiquid capital markets and lack of exit opportunities, and lack of skill, and will on the part of SME entrepreneurs themselves for receiving risk capital.

While these obstacles are not insurmountable, however, most of them require fundamentally new approaches and a fine balance between government- supported interventions, market-driven incentives, and ‘blended value’ – social/commercial investment approaches. Such approaches, which often rely on partnerships between different actors, are explored in more details in part V.

Access to skills and knowledge
The third essential pillar of entrepreneurship identified by the UN Commission is human capital: “A firm’s competitive advantage comes from its entrepreneurial capabilities; its management and technical know-how, including labour-management relations, information technology skills, basic finance, economics and project management; as well as the kills, education and adaptability of its employees.”

Important at all stages of enterprise development, such as human capital, is essential for small enterprises which aim to upgrade and integrate into regional and global value chains.

Some of the recommendations made by the UN commission to tackle skills and knowledge gaps include: public-private partnerships that combine on-the-job apprenticeships, with basic education; teach-the-teachers programmes to build local training capacity, entrepreneurial networks and associations for peer-to peer learning, mentoring and coaching relationships between local entrepreneurs and expatriate managers or the country’s own Diaspora; investment in local research on entrepreneurship and management courses, and efforts to stem the brain drain of professionals that occurs in many developing countries, and to encourage the Diaspora to return.

Upgrading, integrating small enterprises into value chains
Even when the fundamental pillars for entrepreneurship are being addressed, major obstacles persist in increasing the productivity and growth of small enterprises.
Research carried out by the German Development Institute on the role of small enterprises in productivity enhancement, points to the fact that small enterprises in developing countries tend to contribute less to productivity growth and national competitiveness, than their counterparts in industrialised countries.

The research suggests five essential and inter-related gaps in small enterprise performance comparing stylised enterprises in developing and industrialised economies. All five of these “gaps” needs to be addressed in order to improve prospects for high-impact small enterprise development in developing economies:

• Role of entrepreneurship. In many developing countries, “necessity entrepreneurship” prevails, versus greater levels of “opportunity entrepreneurship” in industrialised countries, which tend to be led by higher skilled and better-capitalised entrepreneurs.

•Firm growth and upgrading. In many developing countries, only a small proportion of micro and small firms grow beyond a certain threshold, due mainly to lack of specific management and/or marketing skills.

The lack of trust in society is another impediment, limiting many small firms to what their families and immediate communities can control or supervise. The result is a lack of more specialist and sophisticated medium-sized companies, often called the ‘missing middle.’

•Technological capabilities. Small enterprises in developing countries mostly focus on low-tech routine operations and use mature technologies as blue prints. On average, compared to their industrialised economy counterparts they are less capable of creating knowledge, applying new technologies and rarely performing R&D, often due to the lack of human capital, business competencies and skills.

•Export competitiveness. In developing countries, the export share of small enterprises tends to be much lower than in industrialised countries, with a few remarkable exceptions in Asia such as China, Taiwan and increasingly, Vietnam.

This situation reflects the technology gap, and in turn, results in small enterprises being excluded from international best practices and sources of knowledge.

Micro entrepreneurs seek action on youth unemployment

By Daniel Essiet, The Nation

The Association of Micro Entrepreneurs of Nigeria (AMEN) said it is ready to work with the government to develop business opportunities to help tackle youths unemployment.

Its President,Prince Saviour Iche, said the nation cannot afford to lose another generation of young people to unemployment and under achievement.

Addressing the annual business meeting of the association in Lagos,Iche said the association is ready to mobilise young Nigerians,including those serving in the National Youth Service Corps(NYSC) to take on small business ventures.

He said the association encourages and supports the development and success of new small and medium sized business firms, through collaboration and by providing productive contacts among operators.

According to him, poverty will never be overcome unless small and medium enterprises flourish.

To this end,he said his association is mobilising every family in Nigeria to own a business.

He said the association wants to stimulate initiatives, innovation, entrepreneurship, rapid technology transfer, and adaptability to the economy.

He said the association wants to pursue programmes which foster enabling environment favourable to small business to carry out their activities.

The Centre Manager,Matori Business Support Centre,Small and Medium Enterprises Development Agency of Nigeria(SMEDAN),Mr Yinka Fisher, said his agency is ready to support the establishment of successful entrepreneurial enterprises.

He said creating high potential entrepreneurs that can generate economic growth and development on a much larger scale requires delivery of regular training to invigorate entrepreneurship and innovations capable of solving business management problems.

Fisher said one of the most effective ways of building sustainable small businesses is bycreating a linkage between them and commercially viable Microfinance Institutions (MFIs).

For this reason,he said SMEDAN is working with the Central Bank of Nigeria(CBN) to provide small entrepreneurs access to essential financial services to help them grow.

Micro finance institutions, he noted, will be able to finance creditworthy low-income entrepreneurs,who otherwise would have no access to mainstream banks.

He said SMEDAN is ready to provide technical assistance to help the CBN launch sound MFIs with capacities to assess entrepreneurs skills.

Through its support for application and linkages among entrepreneurs,Fisher said SMEDAN is committed to facilitating economic development, and the agency aims to further expand the effects of entrepreneurship on GDP growth and jobcreation.

Speaking during the meeting, the General Secretary,Mr Frederick Okeleme,said it is focused on building on the achievements and broadening the scope of activities.

He said the goal of the association is the creation of a large, diverse community of local entrepreneurs capable of promoting sustainable development.

Okeleme said the association is working with every relevant agency to address challenges that 1are hindering small scale operators growing into strong and profitable enterprises.

Microfinance operators charged on relevant products

From Nigerian Tribune

The Director-General of Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Muhammad Nadada Umar, has advised operators of microfinance banks in the country to study their business environment and take into cognisance the culture of the people and try to blend it with the various products they are giving out. Speaking at the opening of the second round of microfinance banks certification programme, organised by SMEDAN in collaboration with the Nigeria Deposit Insurance Corporation (NDIC) and the Central Bank of Nigeria (CBN), Muhammad Umar told the participants that the essence of the training was to polish the MFBs towards efficiency and effectiveness.

According to him, though the environment is tough and challenging, the MFBs should carter for small business operators and see their assignment as a national one and not for their family wellbeing only.

Umar, who was represented at the occasion by the Director of Enterprise Development and Promotion, Mrs. Justina David, disclosed that the essence of the partnership with CBN, NDIC and the MFBs was to reach out to the rural people where the various small business operators were domiciled.

He added that SMEDAN, as an Agency that promotes good environment for the operation of the small businesses, would always want the presence of MFBs to be felt at the localities where the micro and small enterprises operate.

The Director-General re-stated that the MFBs must condescend to the level of the small business owners by getting to know them, know the environment and how to help out, reduce the interest rate to one digit rate, remove collateral hiccups and, above all, allow complete access to funds by these entrepreneurs.

A total of 46 MFBs participated in the training.

Nigeria: SMEDAN signs MoU with six Microfinance Banks on micro-credit

Punch on the Web –

The Small and Medium Enterprises Development Agency of Nigeria, has signed a Memorandum of Understanding with six Microfinance Banks on the provision of micro credit for small and medium scale enterprises in the country. The pact will also enable business owners in the country to benefit from entrepreneurship training programmes put together by SMEDAN and the microfinance banks.

The MFBs are Misau Microfinance Bank, Bauchi; Kada Microfinance Bank, Kaduna; Safeline Microfinance , Abuja; KRGY Microfinance Bank , Jigawa; Atlas Microfinance Bank, Abuja and Fahimata Microfinance Bank in Kaduna.

The Director- General of SMEDAN, Mr. Muhammad Umar, while speaking at during the signing ceremony in Abuja on Tuesday, said the objective of agreement was to create access to cheap finance for small and medium scale enterprises across the country .

He noted that the initiative was part of SMEDAN’s Rural Enterprise Development Programme, adding that arrangements have been concluded to cover all the 774 local government areas across the country.

Nigeria: CBN Calls On Stakeholders in Micro-Finance to Collaborate

Vanguard –

The Central Bank of Nigeria(CBN) on Thursday in Abuja said stakeholders in the microfinance sub-sector must partner to grow the industry. Dr Kingsley Moughalu, Deputy Governor, Financial System Stability, said this at a forum which had as theme: ” Building Successful Multi-Stakeholders” Partnership in Micro-finance.”

sanusi

“The stakeholders” partnership is the way to go into microfinance. It is very important and we are going to be practical about it. Partnership is essential because various stakeholders possess different competence and advantages.

Partnership can provide platform for mutual learning, sharing information, knowledge and experience. It provides greater tool for human and material resources for facilitating growth of micro financing,” he said.

He cited an area of partnership to include capacity-building, saying it was more important than funding or capital investment. Moughalu said the sector needed people who understood the sub-sector, its concept, potential and operations. He said CBN was undergoing regulatory review of micro-finance banking alongside the review of its policy to evaluate the level of impact on the economy.

“By June to July with all these going on, we will be able to come up with a revised micro-finance policy for Nigeria,” he said. He said more than 900 stakeholders were consulted over the new policy. In his address, Alhaji Muhammad Umar, Director-General, SMEDAN, said the idea of micro finance was to provide service to the active segment in society. He said for micro finance to become an integral part of the financial sector, there was need for strong partnership among stakeholders.

“No organisation alone can solve the problem of poverty in a nation. The only way micro finance can achieve its goal is through Public-Private-Partnership,” he said, adding: “policy influence is the key we need to use in all aspects of the policy to strengthen the micro finance sector.”

Also speaking, Mr Babatunde Oralusi, Director-General, Nigeria Capital Development Fund (NCDF), said there was the need to develop avenues for poor people to access funds. He said NCDF convened the forum to support CBN as it strived to review the micro finance policy. Oralusi said there was also need to champion the cause of rural entrepreneurs as it would go a long way in boosting the economy.

He urged stakeholders to utilise the opportunity to contribute ideas that would help to develop the micro finance sector in the country. “There cannot be any development without genuine support from the private sector,”

Why 65% of Nigerians cannot access credit

By Hope Moses-Ashike, Businessday –

A lot of factors which include inability of microfinance banks to enlighten low income earners on their operations and poor corporate governance among others could be attributed to majority of the populace not having access to credit facilities.

From World Bank’s report of 2008, Nigeria has nearly 70 percent of its population living in poverty with more than 54 percent living below the poverty line (less than one US dollar a day). The 2008 Human Development survey of the United Nations ranks Nigeria among the 25 poorest countries, measured on the basis of standard of living, life expectancy and literacy.

Based on this, microfinance scheme was set up by the Central Bank of Nigeria (CBN) as an instrument for providing financial services to the poor who are traditionally not served by the conventional financial institutions.

The policy framework establishing microfinance in Nigeria saddles them with the responsibility of providing diversified, affordable and dependable financial services to the active poor, in a timely and competitive manner, that would enable them to undertake and develop long-term, sustainable entrepreneurial activities mobilizing savings for intermediation and creating employment opportunities and increase the productivity of the active poor in the country, thereby increasing their individual household income and uplifting their standard of living.

However, most of these micro institutions have deviated from the core objective of serving the poor and have engaged in high profile lending as affirmed by Kingsley Muoghalu, deputy governor in charge of financial sector stability who said operators lack understanding of the ideal methods for operating microfinance banks. He attributed the collapse of most of the microfinance institutions to poor corporate governance, non-adherence to best practice and ownership problems.

Muoghalu who spoke at the maiden microfinance certification training programme of operators of MFBs organized by the CBN in conjunction with the Nigeria Deposit Insurance Corporation (NDIC) and Small and Medium Enterprise Development Agency of Nigeria (SMEDAN), in Abuja said in the course of on-site and off-site supervision of the microfinance banks, so many issues bordering on corporate governance, adherence to best practice and ownership problems were identified.

“Some of the directors, our investigations have shown, have over-bearing influence on management staff, who themselves lack relevant skills and knowledge in various microfinance lending models and operational service delivery models”, he said.

Consequently, many of them went down with small savers’ money trapped. As it were, most of these micro savers have lost confidence in microfinance banks. For instance, Sunday Okoh, a barber said he has been saving with one of the microfinance banks but when he needed loan they could not give him because there was not enough money. Having saved up to N16,000 he demamded for aN20,000 but could not have access. Many of the microfinance banks are run like family business with the attendant insider related abuses. More so, they seem to be competing with Deposit Money Banks (DMB).

All these made President Goodluck Jonathan to slam the sub-sector over series of sharp practices saying that they have failed the nation.

Also, Sanusi Lamido Sanusi , affirmed that 65 percent of Nigeria’s population does not have access to credit facilities. Represented Emma Okoidegun, Senior Manager, Development Finance Office, CBN, at the opening of CBN Microfinance Certification Programme in Benin City, Sanusi said since this was no mean a number, the bankers’ bank has devices means of helping people key into the mainstream economy in order to reduce poverty and unemployment in the society.

According to him, the objective of the certification programme which was being held simultaneously in 24 centres in the country was to provide guidelines to micro-finance bank operations across the nation.

“For banking operation to go on smoothly, CBN decided that management staff of Micro-finance banks must undergo this certification programme to meet the requirements to operate”.

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